ACIT, Faridabad V. M/s. Palwal Co-operative Sugar Mills Limited, Palwal

ITA 3697/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0010 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 29-03-2011
• Assessment Year: 1993-1994
• Appeal Filed On: 03-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRENDRA KUMAR
• Assessee Lawyers: SATISH SINGLA
• Keywords: Business income
• Section: 271(1)(c); 143(3); 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.G . BANSAL, ACCOUNTANT MEMBER I.T.A. NO.3697 /DEL/2010 ASSESSMENT YEAR : 1993-94 ASSTT. C.I.T., VS. M/S PALWAL CO-OPERATIVE CIRCLE-II, FARIDABAD SUGAR MILLS LTD., PALWAL PAN NO.25-060-AY0 128 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AMRENDRA KUMAR, SR. DR RESPONDENT BY : SHRI SATISH SINGLA, CA ORDER PER K.G. BANSAL, AM: THE REVENUE HAS TAKEN UP TWO GROUNDS IN THIS APPEAL, THE S UM AND SUBSTANCE OF WHICH IS THAT THE LEARNED CIT(A) ERRED IN DELETING THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (THE ACT), BY HOLDING THAT THE ORDER WAS PREMATURE AS APPEAL WAS PENDING AND, THUS, NOT DECIDING THE MERITS OF THE LEVY. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETU RN ON 29.10.1993 DECLARING TOTAL INCOME OF `1,75,29,500/-. THE ASSESSMEN T WAS COMPLETED UNDER THE PROVISIONS OF SECTION 143(3) OF THE ACT ON 31.01.1 996 DETERMINING THE TOTAL INCOME AT `2,07,24,440/-. PENALTY PROCEEDINGS WERE ALSO INITIATED U/S 271(1)(C) OF THE ACT, WHICH WERE FINALIZED ON 29.01.2004 BY LEVYING T HE MINIMUM PENALTY OF `8,58,700/-. THIS PENALTY WAS DELETED BY THE LEARNED CIT (A) BY MENTIONING THAT THE MISCELLANEOUS APPLICATION OF THE ASSESSEE WAS ALLOWED BY THE TRIBUNAL AND 2 THEREAFTER SOME ADDITIONS/DISALLOWANCES WERE DELETED WHILE SOM E OTHERS WERE CONFIRMED. THEREFORE, THE LEVY OF PENALTY WAS PREMATURE. THE PENALTY HAS TO BE DECIDED AFTER MAKING ASSESSMENT AS PER THE DIRECTIONS OF T HE TRIBUNAL. 3. BEFORE US, THE LEARNED COUNSEL SUBMITTED THAT THE APPEAL HAS BEEN DECIDED BY THE TRIBUNAL AND THE FATE OF VARIOUS ADDITIONS IS A S UNDER:- S.NO. ADDITION STATUS 1. 5,00,000 ALLOWED `2,50, 000/ - U/S 80G BY A.O. 2. 60,000 RESTORED TO A.O. BY ITAT VIDE PARA 6 OF THE ORDER. 3. 5,60,000 DELETED BY ITAT VIDE PARA 16 OF THE ORDER 4. 47,772 RETAINED 5. 1,21,820 DELETED BY ITAT VIDE PARA 22 6. 2,48,248 RESTORED TO A.O. BY ITAT 7. 15,575 CONFIRMED 8. 13,069 CONFIRMED 9. 6,24,096 RESTORED TO A.O. BY ITAT 3.1 IT IS FURTHER SUBMITTED THAT THE ONLY DISALLOWANCE CONFIRMED IS IN RESPECT OF THE LOSS OF AGRICULTURAL OPERATIONS, CLAIMED BY THE ASSESSEE AT `47,772/-. THREE MATTERS HAVE BEEN RESTORED TO THE FILE OF THE ASSESSING OFFI CER, INVOLVING ADDITION/DISALLOWANCE OF `60,000/-; 2,48,248/- AND ` 6,24,096/-. THE ASSESSMENT IS STILL PENDING IN RESPECT OF THESE MATTERS. I N VIEW OF THIS FACTUAL POSITION, IT WAS ARGUED THAT THE LEARNED CIT(A) WAS RIG HT IN DELETING THE PENALTY. 3.2 IN REPLY, THE LEARNED DR DID NOT DISPUTE THE FACTUAL POSITION SUBMITTED BY THE LEARNED COUNSEL. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSION S MADE BEFORE US. IT IS SEEN THAT THE ASSESSMENT HAS BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER IN RESPECT OF THREE MATTERS AND SUCH ASSESSMENT IS PENDING. I N CASE ANY ADDITION OR DISALLOWANCE IS MADE IN RESPECT OF THESE PENDING MATTERS, T HE ASSESSING OFFICER CAN 3 INITIATE THE PENALTY IN THE FRESH ORDER IF THE FACTS SO W ARRANT. THE ONLY DISALLOWANCE CONFIRMED IS IN RESPECT OF MINOR AMOUNT OF `47,772/-, REPRESENTING LOSS IN AGRICULTURAL OPERATIONS. THE REASON IS THAT AS AGRICU LTURAL INCOME IS NOT LIABLE TO TAX UNDER THE ACT, LOSS RESULTING FROM THE OPERATIONS CAN AL SO NOT BE SET OFF AGAINST THE BUSINESS INCOME. HOWEVER, NO PARTICULAR ARGUMENT WAS MA DE IN THIS REGARD BY THE LEARNED DR FOR SUSTAINING THE PENALTY. OTHERWISE ALSO, T HE CLAIM SEEMS TO HAVE BEEN MADE DUE TO WRONG READING OF THE LAW. AS SUCH, WE ARE OF THE VIEW THAT NO PENALTY NEED BE LEVIED IN RESPECT OF THIS AMOUNT, LOOKING T O THE SMALLNESS OF THE TAX INVOLVED. THEREFORE, WE DO NOT FIND ANY SUCH ERROR IN THE ORDER OF THE LEARNED CIT(A), WHICH REQUIRES ANY CORRECTION FROM US. 5. IN RESULT, THE APPEAL IS DISMISSED. ORDER WAS PRONOUNCED IN OPEN COURT ON 31.03.2011. SD/- SD/- ( I.P. BANSAL ) ( K.G. BANSAL ) JUDICIAL MEMBER ACCOUNTA NT MEMBER NS DT. 31.03.2011. COPY FORWARDED TO:- 1. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-II, FARIDAB AD. 2. M/S PALWAL CO-OPERATIVE SUGAR MILLS LIMITED, PALWAL. 3. THE RESPONDENT 4. THE CIT 5. THE CIT (A)-, NEW DELHI. 6. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. 4 BY ORDER (ITAT, NEW DELHI).